ISRAEL AND THE BOMB: SECRET FILE PROVOKED A STORM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81M00980R002000090085-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 16, 2016
• Document Release Date: October 4, 2004
• Sequence Number: 85
• Content Type: NSPR

Approved For Release 2004/10/12 : CIA-RDP81 M00980R002Q00090085-8
WASHINGTON STAR DATE 2 -TV J,-,-,,
Page L,
Israel and tie lalornb
By John Flalka
Washington Star Staff Writer
In late 1975 a young analyst from
the Nuclear Regulatory Commission,
a man who had a top security clear-
ance, was told that he had "no need
to know" about what may be the
most serious nuclear safeguards case
the United States has ever faced.
The incident proved.to be the spark
that eventually ignited a secret but
sizable war between two factions in
the community of intelligence and
energy officials with the exotic and
sensitive assignment of preventing
any material for an atomic bomb
from falling into the hands of terror-
ists or a non-nuclear power.
It was a war between the believers
and the skeptics, a war that alarmed
the "Secret Seven" and two presi-
dents,. a war that cast doubt on the
value of "the Bonnie and Clyde Syn-
drome," a war that had some of the
nation's most respected energy offi-
cials conspiring to make statements
designed to mystify the press and
confuse Congress.
It was a conflict that eventually led
to the disclosures that the CIA had
evidence both that Israel had the
atomic bomb by 1968 and that the
bomb material may have been di-
verted from a U.S. plant.
It was a collision between execu-
tive branch and Congress. that re-
sulted in the admission that two
secret File Provoked a Storm
War rages on adequacy of nuclearafeguards
federal agencies had misled Con-
gress with an optimistic "party
line."
ALL OF THIS surfaced this week
in three heavily censored documents
released by the NRC entitled "In-
quiry Into the Testimony of the
Executive Director Fdr Operations."
Collectively, they offer an unprece-
dented public view of the bureauc-
racy that is supposed to prevent nu-
clear proliferation.
The story, drawn from NRC
investigators' interviews with 31 past
or present government officials and
employees in t4e nuclear safeguards
area, begins i , 975 with James Con-
ran, an intenso, 37-year-old nuclear
engineer who t` as given the mission
to put togetherl a history of,the na-
tion's efforts. to protect nuclear
materials sine the Atoms for Peace
program of 1154 allowed it to be
placed in privy hands.
As Conranloon discovered, this
was not easy.., he NRC was formed
in 1975 by Con p ess to separate what
many people believed to be an inher-
ent conflict o interest in the old
Atomic Energy Commission, which
housed the efforts to regulate and
promote nuclear power under the
same organizational roof.
Most of old AEC, including the
promotional end, was spun off into
another agency, the Energy Re-
search and Development Administra-
tion, and it soon became clear that
ERDA officials considered the NRC
to be an upstart agency, one that
could not be trusted with all the se-
crets. (ERDA has since been merged
into the Department of Energy.)
IN HIS RESEARCH among the old
AEC records at ERDA in October
1975, Conran discovered one file was
missing.
The file involved' a company called
Nuclear Materials and Equipment
Corp., of Apollo, Pa., and its prgsi-
dent, a former AEC chemist named
Zalman M. Shapiro. It was so secret
that it was kept apart from the other
classified files. Conran was not al-
lowed to see it.
He protested the refusal to NRC's
top safeguards official, then Kenneth
R. Chapman, who called Edward B.
Giller, one of ERDA's top intelli-
gence officials.
Giller, a former Air Force major
general, said Conran had "no need to
know" the information, adding that
ERDA would supply it if Chapman
insisted. Chapman, a former Air
Force general, declined.
See NUCLEAR, A-7
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NUCLEAR
Continued From A-1
Conran decided to go further, and
in December he confided in Edward
Mason, then one of the NRC's five
commissioners, his worries about the
NUMEC files.
Mason, in turn, was concerned
about what he called the "Bonnie and
Clyde" syndrome, which he said
tended to dominate U.S. safeguards
policy. It was the assumption that
"the most likely scenario for a theft
and diversion of nuclear material
was an assault on a facility by
heavily armed terrorists."
Mason, an engineer, felt a more
probable diversion threat was one
that would go through "the back
door," carried out by an insider, but
he evidently had problems convinc-
ing former military people of that.
HE TOLD William A. Anders, the
former astronaut who then served as
the NRC's chairman, that if there
was CIA material about NUMEC, as
Conran suspected, the NRC was enti-
tled to a briefing.
So it was that in February 1976, the
CIA's top-ranking expert in techno-
logical matters, Carl Duckett, came
to the NRC to tell them what the CIA
knew about the case.
Because of the potential for se-
curity leaks, NRC confines matters
of atom bomb design and other
super-sensitive items to a group
known as the "Secret Seven." The
group then included Anders and the
other four NRC commissioners along
with Chapman and Carl Builder,
Chapman's top safeguards manager.
This time, however, the group was
enlarged to include a few other top
NRC aides, including Peter L.
Strauss, then the NRC's general
counsel.
Duckett told the group that the CIA
had a variety of evidence pointing to
the fact that Israel had obtained
atom bomb material in the mid-1960s
and that the agency had formed a
"strong opinion," based on circum-
stantial evidence, that the material
had come from NUMEC, which had
reported a "loss" of 202 pounds of
highly enriched uranium in 1965.
(Shapiro has called this story "ridic-
ulous. ")
DATE )_ -~
Chapman and several others could
not recall whether Duckett had
offered any further proof.
Strauss said he thought that if the
CIA information was accurate, the
government had a strong circum-
stantial case, including "missing ma-
terial, motive and opportunity."
He, too, the NRC investigators
later discovered, had become
worried about the Bonnie and Clyde
Syndrome:
"The safeguards area under the
former director, Kenneth Chapman,
seemed to him overwhelmed by for-
mer military men. Their approach
was to consider in depth the possibil-
ity of a gang of ruffians (terrorists)
who could surround a plant. The
possibility of conspiracy to embezzle
at high corporate levels was the most
difficult to generate mechanical solu-
tions for, and so the problem tended
to be 'wished away.' "
Commissioner Mason was
disturbed because he thought it was
essential that the substance of the
briefing be described to the NRC's
safeguards staff, but the rules of the
meeting, set by the CIA, did not allow
that.
OTHER MEMBERS of the group
appeared more skeptical. Victor
Gilinsky, one of the commissioners,
told NRC investigators that he was
"not entirely persuaded , by the
briefing" because Duckett's evidence
was circumstantial. According to the
investigators, "Anders .. , took what
the briefing official said with a grain
of salt and wondered if he was on sort
of a personal crusade."
Page 4-2
the file and not reported any prob-
lems, the files must not have con-
tained safeguards matters.
Finally, Conran was removed from
safeguards and assigned to a unit
that sets standards for nuclear power
reactors.
Last June, The Washington Star
reported lingering suspicions of some
nuclear officials of a possible diver-
sion of NUMEC uranium to Israel.
At the time, both NRC and ERDA
were embroiled in responding to the
Freedom of Information query of a
reporter, David Burnham of The
New York Times. Burnham had
asked the government to account for
all highly enriched uranium and plu-
tonium - both bomb-grade materials
- that had been lost by government
and government-inspected nuclear
facilities over the years. In nuclear
jargon, losses are called MUFs, an
acronym for "Material Unaccounted
For."
The Star story, meanwhile, piqued
the interest of two House subcommit-
tees and it became clear that ques-
tions would be asked about NUMEC
when the two agencies released their
MUF reports.
THE PROBLEM was that both'
agencies had prepared drafts saying
there had been "no evidence" of any
diversion since the nuclear era
began. This phrase set off the battle
between the skeptics and the believ-
ers.
According to the NRC investiga-
tors, the heavyweight among the
skeptics was James R. Schlesinger,
President Carter's energy adviser,
who, among other government posi-
tions, had been director of the CIA.
When Schlesinger saw ERDA's
draft, he placed his finger on the
page that contained the "no evi-
dence" statement and asked Alfred
D. Starbird, ERDA's top intelligence
official, "Are you sure? Can we say
this?"
Starbird, formerly a lieutenant
general in the Army, replied, "I am
and we can."
At another point Schlesinger con-
fronted Starbird's safeguards man,
Harvey Lyon, with the "no evidence"
statement. "Can we say that?" he
asked. Lyon replied, "Yes."
Within NRC the skeptics' attack on
"no evidence" was led by Commis-
sioner Gilinsky. Investigators said
Gilinsky felt there was "pressure
'from,ERDA tQ, adhere,to'a partyyline,
that 'everything" was all right with
safeguards."
BECAUSE THE NRC was an inde-
pendent regulatory agency, Gilinsky
asserted that the NRC "has to state
this one correctly."
But Gilinsky had been out of the
country and returned to find the NRC
statement had been sent to the print-
ers with the "no evidence" phrase
still in it.
The issue came to a head during an
Aug. 2 briefing for the NRC officials
who would preside at the press con-
ference to be held when the MUF re-
ports were made public. Gilinsky
strenuously objected to the use of the
phrase. Others in the briefing-asked
him why.
Builder decided that what he had
heard was "not the kind of evidence
on which to base rule changes." John
Davis, the NRC's second ranking in-
spection and enforcement. official,
told investigators that his memory of
the Duckett briefing "was not very
clear," but he concluded that "no ac-
tion was called for."
But something had happened at the
briefing. There was a new scenario
that people began to worry about in
place of Bonnie and Clyde. The inves-
tigators noted that, according to Gi=
linsky, "the commission took the sub-
ject of safeguards much more
seriously, particularly the `insider`
threat."
The period after the Duckett brief-
ing was an uneasy one for Conran,
the man who.had rais d thq, }ssue in
the first place : Frustr ed at' vl at'he
saw as a lack' of response, he went
beyond the commission,, writing in
general terms to congressmen and
eventually to President Carter,
'Df,ICKETT SAID that the CIA had
prepared a report on Israel's new nu-
clear weapons capability ' and that
Richard Helms, then head of the CIA,
personally took it to President Lyn-
don Johnson. Johnson, according to
Duckett's version, told Helms,
"Don't tell anyone else, even Dean
Rusk...."
In later accounts to NRC investiga-
tors, the officials placed varying
weight on what Duckett said. Even
their memories of the physical hap-
penings vary.
For example, Marcus A. Rowden,
another former commissioner, stated
an information package was put on
the table before the commissioners
and staff, but was not left" because
the NRC did not have an adequate
safe "for highly sensitive materials."
MEANWHILE, A number of things
began happening to Conran within
the NRC. Conran had asked Thomas
J. McTiernan, director of the NRC's
office of internal inspection, to inves-
tigate the lack of response. Instead,
McTiernan produced a report that
suggested Conran might have psychi-
atric problems.
A panel of Conran's fellow safe-
guards experts was convened on the
matter but concluded after being
denied access to NUMEC materials
that since higher officials had seen
"Because there is evidence," Gi-
linsky replied.
But Gilinsky got an argument from
Commissioner Richard Kennedy. As
the current NRC chairman, Joseph
M. Hendrie, interpreted the dispute
for investigators, "Kennedy means
proof while Gilinsky means indica-
tion."
A compromise was reached. After
talking Gilinsky out of an "erratum"
sheet stating there was no "conclu-
sive" evidence, the officials decided
to write a press release saying NRC
data covered only the period from
1968 to the present, leaving out the
1965 NUMEC episode.
WHILE THE "no evidence" battle
raged uptown between the skeptics
and believers, Lee V. Gossick, the
NRC's top operating official, went to
Capitol Hill and managed to get the
NRC into much more serious trouble
over "no evidence."
Part of the problem was that Gos-
sick's timing was bad. Rep. Morris
Udall's House Interior Committee
had just acquired jurisdiction over
the NRC from the friendly Joint
Committee on Atomic Energy.
To Udall, the growing flap over
NUMEC represented a more funda-
mental problem. How could his com-
mittee oversee safeguards problems
if the NRC wouldn't admit there were
any?
July 29, Gossick told Udall's
subcommittee on energy that there
was "no evidence" of adiversion.
In August there were three vacan-
cies on the commission. Only
Kennedy and Gilinsky were left, so
they delegated the right to speak for
the commission to Gossick, a former
Air Force major general who, for
some reason, had never been allowed
toy be a member of the "Secret
Seven," and had not been invited to
the Duckett briefing.
Gossick, however, had been in the
middle of the fight between the skep-
tics and the believers, and he had
also been briefed in a small group on
NUMEC by Kennedy and Gilinsky in
preparation for the MUF press con-
ference.
NEVERTHELESS, Gossick,
speaking on behalf of the commis-
sion, told a House Commerce sub-
committee headed by Rep. John Din-
. D-Mich., on Aug. 8 tat the
NRC's view was "there has been no,
evidence to indicate that any diver-,
sion has taken place."
In November, Udall and Dingell
charged that Gossick had misrepre-
sented the matter before Congress.
That charge resulted in the volumi-
nous NRC investigation and to the
surfacing this week of the heavily
censored documents.
Ironically, Gossick, who has been
described by a number of officials as
a "nice guy" and a "good public ser-
vant," asserted that he never in-
tended to mislead Congress.
But as Strauss told the investiga-
tors, Gossick - never a leader of the
Bonnie and Clyde Syndrome enthusi-
asts, not a major power in the
warfare between the skeptics and the
believers - "may well have been its
first victim."
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